July, 2024
July 2024
Sachin Jain: Utilization management – Doctors hate it, patients hate it
Jul 4, 2024, 07:46

Sachin Jain: Utilization management – Doctors hate it, patients hate it

“Among the most difficult and complicated topics in managed care is utilization management.

Doctors hate it.

Patients hate it.

And even employees in the managed care companies that perform utilization management hate the friction it creates with their most important constitutents.

So why do we have utilization management?

It’s unpopular to say so—but left unfettered, a small fraction of ordering doctors see the absence of utilization management as a license to order tests and procedures that aren’t indicated or aren’t necessarily valuable to patients.

So, in short, to manage a meaningful fraction of outliers, the industry has engaged a blunt instrument—utilization management—to manage the cost (and quality; yes, hard to believe, but quality, too) of care.

It has come to be viewed as a necessary evil of the system.

SCAN has taken the position that most utilization management should be performed by medical groups that govern themselves.

How does this work?

We delegate most risk for patient management to at-risk medical groups (others would call these value-based medical groups) and then they make the decisions themselves about what care to authorize and what care to deny.

This approach puts decisions about care closer to the doctors who are actually caring for the patients.

In fact 92% of SCAN’s 280,000 patients are in these types of risk-based arrangements and not subject to any utilization management from us as the insurance company.

While this approach works for us at SCAN, what do we do for the broader group of patients?

For one thing, our industry must commit to faster turn-around and less administratively burdensome processes.

What our industry puts doctors and patients through—long wait and hold times; unqualified reviewers; firm decisions that are easily reversed with enough pressure—is totally unacceptable and occasionally borders on abusive to doctors and patients. We need easy, real-time adjudication of ordering at the point of care and nothing less.

Before the government imposes such standards, the industry should commit to fast turnaround times; rapid technology-based solutions; and an easy, timely appeals process.

Will utilization management ever go away? No.

Should it? No.

But can we make it better for doctors and patients—and align it more with the original intent, yes.

We have normalized something very abnormal and it’s time to look at ourselves in the mirror and ask whether this is the world we want.

Almost of all of us would resoundingly say: No.”


Sachin Jain is the President and CEO of SCAN Group and Health Plan and an Adjunct Professor of Medicine at Stanford University School of Medicine. He also serves as a Board Member at The Paul & Daisy Soros Fellowships for New Americans, an Academic Hospitalist (WOC) at the U.S. Department of Veterans Affairs, and a Board Member at America’s Health Insurance Plans (AHIP).